Vietnam on world newspapers

http://www.businessweek.com/globalbiz/content/sep2006/gb20060911_743957.htm?chan=globalbiz_asia_investing
SEPTEMBER 11, 2006
Asia
By Frederik Balfour
Saigon''s Stock Market Surges
No longer a joke, the Vietnam stock exchange is up by 67% this year, and it welcomes foreigners interested in mines, pharma, and Nike
For most of its six-year history, the Vietnamese stock market has been something of a joke. As recently as January, its market capitalization was less than $500 million while average daily turnover was all of $700,000. International fund managers viewed the Ho Chi Minh City Stock Exchange as nothing more than a financial curiosity not worth their time.
But get this: Vietnam''s stock market has turned in a better performance this year than China''s two white-hot exchangesâ?"in Shanghai and Shenzhenâ?"and is tops in the region. It is up 67% as of Sept. 11 and 97% in the past 12 months. Market capitalization has increased sixfold, to $3 billion, and it could easily double in the next 12 months if planned initial public offerings come to market as expected. And while that''s still pocket change to most money managers, "now is the time to move," wrote Hong Kong-based Pan-Asian equity analyst Garry Evans in an HSBC research report released in early September.
LACK OF BENCHMARKS. That''s not to say investing in Vietnamese equities isn''t a white-knuckle ride. The market climbed 105% before hitting a peak in late April then lost 38% before bottoming out at the beginning of August. It has since climbed back up 28%. And as in any emerging market, transparency is a problem. None of the stock exchange''s 48 listed companies is subject to au***s by international accounting firms.
Though the companies are required to release quarterly earnings reports, the absence of sophisticated analyst research on a company-by-company basis makes it difficult to rely on basic benchmarks such as price earnings ratios. "There are no consensus numbers, it''s pretty hard to tell," says Spencer White, Merrill Lynch (MER) equity strategist in Hong Kong.
Yet White is still one of Vietnam''s biggest boosters. A report he penned back in February, in which he declared Vietnam a "10-year-buy," played no small part in the first-quarter rally. Local retail investors, who account for 95% of the market in Vietnam, bought in anticipation of a flood of foreign money. White says the market got ahead of itself, though now, after a healthy correction it offers "the opportunity to buy into one of highest growth economies in Asia."
EARNING A PLUS. Economic fundamentals certainly look good. Vietnam has boasted the second fastest-growing economy in the region after China''s in recent years, and it is replicating its Communist big brother''s privatization of state-owned companies and embrace of the market economy. Vietnam''s economy is expected to grow 8% this year to $60 billion, on the back of 8.5% growth in 2005
Standard & Poor''s on Sept. 7 raised Vietnam''s sovereign cre*** rating to BB+ from BB, citing the country''s economic growth prospects, improvements to infrastructure, and reforms in the banking system. Another enticement to potential investors is the likelihood Vietnam will be admitted to the World Trade Organization by the end of this year
In 2005 the country attracted $5.8 billion in foreign direct investment as money poured into pharmaceuticals and shoe and mobile-phone manufacturing. In March, Vietnam made big headlines when Intel (INTC) Chairman Craig Barrett traveled to Ho Chi Minh City, also known as Saigon, to receive an investment license to invest up to $605 million building a semiconductor test and assembly plant there (see BusinessWeek.com, 3/13/06, "Good Morning, Vietnam").
LOW CEILING. The good news behind all this is that foreigners can participate directly in the Vietnam stock market. This entails obtaining a trading code, a relatively simple process of submitting a four-page application form in English together with supporting documents translated into Vietnamese. Banks such as Merrill Lynch can also buy shares on behalf of individuals. There are no foreign exchange limits on repatriating income, nor is there any withholding tax on dividends or capital gains.
But obtaining the right to buy equities is the easy part. Because the 49% ceiling on foreign ownership has already been reached for most listed companiesâ?"it''s 30% on Vietnamese banksâ?"finding tradable shares in the best companies is extremely difficult. For example, Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), in which Melbourne-based ANZ Bank holds a stake and listed in July, trades at a price ratio more than double the average for banks elsewhere in the region.
Even so, the 30% foreign limit has been reached. Together with Vietnam Dairy Products Joint-Stock Company (see BusinessWeek.com, 1/31/06, "Vietnam: Land of Milk and Honey"), Sacombank accounts for more than 50% of the market capitalization.
ENTER THE DRAGON. There is talk, however, of lifting the ceiling on foreign ownership again. "They have to make a decision fairly quickly," says Merrill Lynch''s White, who points out there has been an avalanche of foreign funds trying to flow in since the limit was revised upwards from 30% to 49% last October.
In the meantime, the best way to gain Vietnam exposure might be through buying listed closed-end funds. These typically invest in both listed and over-the-counter Vietnamese stocks, a potentially large pool of some 2,400 companies. There are about a dozen closed-end Vietnam funds, most of them listed in London or Dublin. The largest is Vietnam Enterprise Investment Fund, managed by Dragon Capital since 1995, with a net-asset value of more than $350 million. Saigon-based Dragon also manages the $192 million Vietnam Growth Fund.
The $230 million Vietnam Opportunity Fund is managed by VinaCapital and is listed on London''s AIM board. It currently trades at a more than 30% premium to net-asset value. Other Dublin-traded funds include PXP Vietnam Fund, and PXP Vietnam Emerging Equity Fund. Prudential says it plans to begin raising between $150 million and $200 million for an offshore Vietnam fund, pending Vietnamese regulatory approval expected within a few months.
CURRENT FAVORITES. However, Prudential may have its work cut out for it, as existing funds are already having trouble finding places to park their money inside Vietnam. Instead, experts advocate the indirect route of investing in overseas companies with significant exposure to Vietnam. HSBC suggests Toronto-listed mining stocks Tiberon Minerals with a major stake in a Vietnamese tungsten mine, and gold exploration company Olympus Pacific Minerals.
Merrill''s Spencer White likes Hong Kong-listed Yue Yuen, which owns Vietnamese manufacturing plants producing sports shoes for Nike (NKE). Also among his favorites are Singapore-listed Fraser & Neave, which derives 35% of group profits from its Vietnamese brewery and owns a chunk of Vinamilk. Jonathon Waugh, manager of PXP Vietnam Asset Management in Saigon, likes Ellipsiz, also based in Singapore, which manufactures probe cards used in test and assembly of semiconductors
Yet greater breadth and depth in listed stocks may soon be in the offing. In January, a new securities law takes effect in Vietnam that will require unlisted companies whose shares trade over the counter to be subject to the same reporting requirements as listed companies. The current law has discouraged many from listing on the stock market. The government is also offering a 50% tax break for companies during their first two years on the exchange
If this carrot-and-stick approach works, billions of dollars of companies'' value currently traded on the OTC market could become fair game for foreign investors. That could bring the market capitalization to about $10 billion by the end of next year, according to Merrill Lynch, which received a trading code to invest directly in securities in August.
Balfour is Asia Correspondent for BusinessWeek based in Hong Kong

Foreign Banks in Vietnam Spell Out Fears
Threat to Prosecute ABN Amro Workers Spurs Lenders'' Letter
By JAMES HOOKWAY
September 18, 2006
Major foreign banks in Vietnam have expressed concern to the country''s central bank over the threatened criminal prosecution of several ABN Amro Holding NV staff in connection with a currencytrading dispute, a development that has tainted the reputation of this fast-growing economy.
The dispute involves almost 600 foreign-exchange transactions between the Haiphong branch of state-owned Industrial & Commercial Bank of Vietnam, known as Incombank, and the Hanoi branch of ABN Amro. Vietnamese police accuse four Vietnamese staffers at the Dutch bank of complicity with Incombank currency traders, who lost more than $5 million in a series of transactions between April 2003 and February 2006.
In a letter dated Sept. 1, the Banking Working Group of the Vietnam Business Forum -- which represents foreign banks in Vietnam -- wrote to the State Bank of Vietnam expressing "grave concern" that the ABN Amro case indicates that nongovernment-owned and foreign banks could be held criminally liable if "normal" trading transactions result in losses to state-owned banks.
The group also warned that the case is bringing adverse publicity to Vietnam, one of Asia''s hottest emerging markets and the location of a November Asian-Pacific summit to be attended by U.S. President George W. Bush and other leaders including those of China, Japan and some Latin American nations.
The letter was signed by senior Vietnam-based executives of Australia & New Zealand Banking Group Ltd., Citigroup Inc., HSBC Holdings PLC, Standard Chartered PLC and Société Générale SA, among other banks.
In the letter, a copy of which was seen by The Wall Street Journal, the banking group said that "the key issue which has been raised by our members based on public reports is whether a foreign or non-state-owned bank that trades in the normal course of business
with a state-owned commercial bank or enterprise can be criminally liable under Vietnamese law if the trade results in a loss to the State."
The letter said the "conclusion that foreign businesses are likely to draw...is that it is indeed a potentially criminal matter," adding that, "If that conclusion is correct, the criminalization of what appears on the surface to be a normal business activity is of grave
concern generally to all our members."
It wasn''t immediately clear whether the central bank has responded to the foreign bankers'' letter. Efforts to contact central-bank officials Friday were unsuccessful.
The dispute between Incombank and ABN Amro -- which surfaced publicly in July -- has caused anxiety in the foreign business community in Vietnam, not least because of the treatment by police of the bankers involved.
Two of the Vietnamese traders at ABN Amro are being detained without charges -- a customary practice under Vietnamese law -- while another two are being held under housearrest. All four potentially face 20 years in jail if convicted of helping to embezzle state funds, while one of the traders at the Vietnamese bank could be sentenced to death if convicted of embezzlement. So far, no one has been charged with an offense.
Police initially barred the senior executive at ABN Amro''s Hanoi branch, De Pham, a U.S. citizen who is seven months pregnant, from leaving the country. She was later allowed to seek medical treatment in Singapore after posting a $10,000 bond.
The case has also strained diplomatic ties between Vietnam and the Netherlands.
The Dutch minister for development cooperation, Agnes von Ardenne, told reporters in Hanoi last week she was concerned about "the role of the police" in a matter that would more normally be under the jurisdiction of Vietnam''s financial regulators.
Vietnamese newspapers on Sept. 9 quoted chief police investigator ************ as saying the criminal investigation would be dropped if ABN Amro repaid the money that Incombank lost.
A civil suit that Incombank earlier filed against ABN Amro has been suspended while police pursue the criminal inquiry.
Vietnamese police allege that an Incombank trader who conducted the currency transactions with ABN Amro wasn''t legally authorized to trade foreign currencies, and that ABN Amro''s staff knew this but proceeded to trade with the person anyway.
The Vietnamese authorities also accuse ABN Amro of violating a 1999 central-bank regulation requiring the registration of all foreign-currency traders -- a rule that wasn''t enforced until July this year, several months after some of the traders were detained.
Vietnamese authorities also allege that ABN Amro has been illegally using a foreign- exchange trading practice known as netting -- reducing the transfer of funds between two parties to a net amount at the end of the trading day. Netting is widely practiced internationally, and people familiar with the situation say it is also still practiced in Vietnam.
A spokeswoman at ABN Amro in Hong Kong said the bank "believes it transacted the trades with Incombank in accordance with common market practices as well as the legal and regulatory framework being enforced by the relevant authorities at the time. We therefore maintain that the trades in question are valid and all the trades were settled."
Write to James Hookway at james.hookway@awsj.com1
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Vietnam''s financial traffic starts to flow
By Amy Kazmin and Louise Lucas
Published: September 19 2006 03:00 | Last updated: September 19 2006 03:00
Forget R&R on the beaches, these days Americans - along with Europeans and Asians - are heading to Vietnam to exploit the country''s nascent capital markets.
Investment bankers from leading houses are making monthly trips to Ho Chi Minh City and Hanoi. Many fund managers are also making repeated forays. Funds on the ground are mushrooming, raking in some $500m in the past six months or so.
"We have probably set up more funds this year than we did in the previous 11 years put together," says Tony Foster, managing partner of Freshfields in Vietnam.
The lure is not hard to fathom. Vietnam''s economy has been growing at about8 per cent a year, second only to China''s. The country is rich in resources and, unlike most in the region, is a net oil exporter. On top of that, Vietnam boasts political stability, steady inflows of foreign direct investment and a stock market up 67 per cent this year.
In tones reminiscent of economist Barton Biggs - whose "I''m tuned in, overfed and maximum bullish" pronouncement on China in 1993 sparked a rally in neighbouring Hong Kong - strategists are heaping praise on Vietnam.
"Vietnam is a little like China was 10 years ago and India a few years ago," says one banker. "It''s the next big thing."
Sadly for the bulls, it is not that easy. The five-year- old Vietnam Stock Exchange has a market capitalisation of just $2.7bn, and average daily turnover is a mere $5m. There are a growing clutch of funds, often Dublin or London-listed, as well as a $750m sovereign bond and opportunities for private equity. Overall, however, the
investible universe is small.
That is not deterring the investment banks. Merrill Lynch this month acquired a trading code, which gives it the right to hold shares directly, following Deutsche Bank, which won its code last month. Citigroup has had a similar arrangement for over a year, and Cre*** Suisse is considering following suit. According to lawyers, the codes are easy to acquire and already held by a number of fund managers.
In ad***ion, many of the big houses offer synthetic trading, using derivatives based on underlying Vietnamese equities. Some are trying to dig deeper roots by taking stakes in local brokerages, principally to obtain a toe-hold in the market since domestic trading commissions are tiny.
Others are still debating how to tackle Vietnam. Goldman Sachs eschews the "planting a flag in every country" model, preferring to service Vietnam offshore - albeit with an increasing number of trips to build relationships
"We are talking to clients in Vietnam about raising debt and equity," says Tim Leissner, a Hong Kong-based managing director at Goldman Sachs.
Citibank, which has been operating in Vietnam since the mid-1990s, has been underwriting the Vietnamese government''s domestic, local currency bonds, with about a 20 per cent market share, and hopes soon to help Vietnamese companies tap the bond market as a source of long-term capital.
The biggest plum is privatisations. A slew of state-owned e nterprises - including state-owned Vietcombank and several telecoms companies - are scheduled to list. However, the pace is proving slow, as Communist authorities agonise over every step in the process. When they finally get off the ground, some of these listings could potentially take place overseas, possibly in Hong Kong or Singapore.
Like other emerging markets, Vietnam has risks, as ABN Amro has discovered. Two of its Vietnamese employees are in prison and two under house arrest - the result of a nasty dispute with state-owned Incombank, which lost $5.4m in foreign currency trades and wants the Dutch bank to cover its trading losses.
The ABN Amro bankers and one Incombank executive are being investigated by police for alleged illegal foreign currency trading, which means they can be held without formal charges for up to 16 months. ABN Amro says the trades with Incombank were carried out in accordance with common market practices.
There is little doubt that market optimism is excessive. As Mr Foster points out, there may simply not be enough deals to hold institutions'' attention, given Hanoi''s deliberately gradual pace of reform.
"Before the bond issue, we used to get investment banks coming through maybe once or twice a year and they were lukewarm about the place. After the bond we got them all coming through on all fronts and they are red hot.
They are all trying to do deals - with not much success yet, I should say."
Copyright The Financial Times Limited 2006

Vietnam, With 49 Stocks, Attracts Investors to `Emerging China''
By Darren Boey
Sept. 22 (Bloomberg) -- Vietnamese stocks are Asia''s best performers this year and the International Monetary Fund''s chief economist is touting the country as an ``emerging China.''''
International investors, who have had too few stocks to select from, may soon gain choices in Vietnam. Companies are listing as the communist nation expands its two-decade-long move to a capitalist system. Entry into the World Trade Organization this year may encourage companies to follow the lead of Intel Corp. and Ford Motor Co. and invest in Vietnam.
The stock exchange, the six-year-old Ho Chi Minh City Securities Trading Center, lists 49 stocks with a market value of $3.1 billion, according to Vietcombank Securities Co. Neighboring Thailand has 485 listings with a value of $132.3 billion.
``As more companies list on the stock market, I''d expect interest in Vietnam, underpinned by strong growth and foreign direct investment flows, to steadily increase,'''' said Brad Aham, who manages the $1.7 billion SSgA Emerging Markets Fund at State Street Global Advisors in Boston.
An average of just $6.6 million worth of Vietnamese shares traded daily in the past three months, compared with $314 million in Thailand and $3.2 billion in Hong Kong, Bloomberg data show.
The Vietnam Stock Index has surged 66 percent this year in dollar terms, the most of 413 Asian indexes tracked by Bloomberg. Chinese indexes are the next-best performers.
Saigon Thuong Tin Commercial Joint-Stock Bank, known as Sacombank, in July became the first lender to trade on the stock exchange, raising the market''s value by 50 percent. Bank for Foreign Trade of Vietnam will sell shares next year, followed by Mekong Delta Housing Bank, according to Tran Dac Sinh, director of the Trading Center.
The Next China?
The stock market started in July 2000 with just two listed companies and a total value of 270 billion dong ($16.8 million).
The International Monetary Fund''s Chief Economist Raghuram Rajan said at a Sept. 14 news conference in Singapore that Vietnam ``was considered by many to be the `emerging China,'''''' owing to its ``relatively strong rates of growth.''''
The IMF forecasts 7.8 percent growth this year, the fastest of any developing Southeast Asian economy, according to the organization''s Web site, while predicting China will grow 10 percent this year. Standard & Poor''s this month raised Vietnam''s cre*** rating to two levels below investment grade, citing the nation''s economic growth potential and commitment to market- oriented policies.
`Critical Mass''
Christopher Wood, a strategist at CLSA Ltd., recommends investors buy into Vietnam.
``It''s a very exciting story,'''' Wood, voted the second-best Asian strategist in an Institutional Investor survey this year, said in an interview at a CLSA investor conference in Hong Kong last week. It featured a seminar on investing in Vietnam.
``In the next couple of years, we might see the Vietnamese stock market reach critical mass as more companies are listed,'''' Wood said. ``The stock market program is finally coming to fruition.'''' He recommends investors put 3 percent of an Asia- excluding-Japan portfolio in Vietnam.
At the moment, though, investing in the nation''s stock market remains difficult for international investors, who typically seek companies with enough shares trading so that they can buy and sell without moving the stock price dramatically. By contrast with Vietnam, China has 1,381 listed companies in two markets, with a value of $650 billion.
``Vietnam is not on our radar screen at the moment because there isn''t enough liqui***y for us,'''' said London-based Nick Timberlake, who manages the $221 million HSBC Global Emerging Markets Equity fund.
New Listings
Overseas investors are restricted to a 49 percent stake in companies listed on the Ho Chi Minh City bourse and a 30 percent holding in Sacombank. What''s more, investors seeking Vietnamese stocks must do so through a securities company registered domestically and must have local currency bank accounts.
One avenue for foreign investors is through Vietnam funds incorporated outside the country, such as the $193 million Vietnam Growth Fund, which is based in the Cayman Islands, and the $96 million Vietnam Dragon Fund, based in Bermuda. Both are managed by Ho Chi Minh City-based Dragon Capital Management Ltd.
The number of targets on Vietnam''s exchange is picking up as the government sells shares in state-controlled companies. Vietnam in the next four years plans to increase the value of its stock market to between 20 percent and 30 percent of gross domestic product from 6 percent, Tran from the Ho Chi Minh City Securities Trading Center said in August.
Foreign Investment
That would lift the stock market''s value to as much as $24 billion, based on Sinh''s estimate of GDP reaching $80 billion by 2010. Besides Bank for Foreign Trade and Mekong Delta Housing Bank, companies including Electricity of Vietnam and Vietnam Post & Telecommunications Corp. will sell shares by 2010, Sinh said. All the companies are government-owned.
The government, which has cut poverty in half since 1993, is aiming to move the country out of the ranks of the world''s lower- income nations by 2010.
Intel, the world''s biggest chipmaker, said this year it would invest as much as $605 million in a semiconductor test and assembly plant in the Ho Chi Minh City area, the biggest investment in Vietnam by a U.S. company. Ford, the second-biggest U.S. carmaker by sales, has invested $100 million in an assembly plant in the Hanoi area in the past decade.
Mark Mobius, who oversees about $30 billion in emerging market equities at Templeton Asset Management, said his funds are ready to pour money into Vietnam. Templeton owns an apartment complex in Hanoi.
``If we were to get more involved in Vietnam we would want a purer exposure'''' through equities, Mobius said. ``Vietnam is still rather small and illiquid at this stage. However, as the market grows we will be interested in investing there.''''
To contact the reporter on this story: Darren Boey in Hong Kong at dboey@bloomberg.net .
Last Updated: September 21, 2006 13:42 EDT

Sep 25, 2006
Localise, localise, localise
By SENIOR POLITICAL CORRESPONDENT, Lydia Lim
A HALF-HOUR drive north of Vietnam''s commercial hub of Ho Chi Minh City is a small slice of Singapore. The 500ha Vietnam Singapore Industrial Park, or VSIP, is about the size of Sentosa - and home to 230 companies from 22 countries. They manufacture products ranging from chocolate ingredients to cosmetics, fibre optic connectors and automotive components.

After a difficult start, the park has made an impressive turnaround. In the past four years, it has earned healthy profits for its Singapore co-owner - a consortium of five companies led by Semb-Corp Industries, whose parent is Government investment company Temasek Holdings. How this small park, which is 14 times smaller than the higher-profile Suzhou Industrial Park in China, climbed out of the red makes for an interesting tale.
This is especially so given the Singapore Government''s strategy of growing stronger bilateral ties with key countries through the joint development of special economic zones and industrial parks.
The VSIP was launched 10 years ago by the prime ministers of Vietnam and Singapore as a flagship government-to-government project. Given this promising start, it might have seemed like a privileged child, born with a silver spoon in its mouth.
But just months after the groundbreaking ceremony, it suffered a body blow when the 1997 Asian financial crisis hit. Ms Low Sin Leng, executive chairman of SembCorp Parks Holdings - which co-owns, develops, markets and manages the VSIP - recalled that, in those years, the going was tough on two counts. First, the crisis made it difficult to attract foreign investors to Vietnam. Second, infrastructure costs were high during this early phase of development. ''In that environment, you can imagine the situation,'''' she said in an interview last week. ''On the cost side, things were piling up and you had not seen a very strong stream of revenue coming in because there was a lot of foundation work being laid, a lot of marketing being done.''But a lot of people took a wait-and-see attitude. There wasn''t a compelling reason for them to say, ''Yes, I must go to Vietnam''.''
In the years since then, Ms Low and her team have managed to turn the park around. Today, she says with a smile when talking of investment returns: ''I think my shareholders cannot complain.'' The VSIP has been profitable in the last four of its 10 years of operation.
It is now the star performer among the four industrial parks managed by SembCorp Parks, a wholly owned subsidiary of SembCorp Industries. The other three are in Batam and Bintan in Indonesia, and Wuxi in China. Ms Low declined to go into the details of the VSIP''s exact return on investment, saying it was not SembCorp''s practice to disclose such figures on an individual park basis.
What is known is that the Vietnam park turned in a profit of US$4 million (S$6.3 million) in 2002. Ms Low said that, since then, its contribution to SembCorp''s bottom line has seen ''a yearly increase''.
Tomorrow, the prime ministers of Singapore and Vietnam will visit the park to commemorate its 10th anniversary. They will also witness the signing of a letter of commitment by SembCorp Parks and its Vietnamese joint venture partner - Becamex IDC Corporation - to develop a second park, VSIP II.
Reason for success
MS LOW is frank in acknowledging that luck had a part to play in the park''s success.
After the initial difficult years, the investment environment in Vietnam improved significantly. Hanoi''s signing of a trade agreement with the United States in 2000 acted as a catalyst for investor interest
in Vietnam.
The pact committed the socialist republic to open its market and tighten intellectual property protection, paving the way for a more rules-based business environment and its entry into the World Trade Organisation - expected by the end of this year . Ms Low also believes that after the 2003 Sars outbreak, which hit China particularly hard, foreign investors who were previously only interested in that country decided to diversify their investment destinations, to the benefit of countries such as Vietnam.
By then, the VSIP had also positioned itself to take advantage of the improved external environment. Here''s how: Where real estate developers and hoteliers are apt to stress location, location, location, the mantra for success in the industrial park business seems to be localise, localise, localise.
Ms Low admits that what pushed up the park''s development costs in its early years was the use of Singapore standards in areas such as design concept and construction methods. She explained that they did so out of concern for the Singapore brand name. But over time, they learned that they could still mainta in that reputation and meet clients'' needs if they adjusted standards to be more in keeping with Vietnamese ones. They started using more made-in-Vietnam
materials and employing more local contractors.
One example of the adjustments was in the way the park''s power cables were laid. In the first phase of development, this was done Singapore-style: underground. But on realising how it jacked up costs, they adjusted and laid cables over-ground. Beyond the nuts and bolts of physical development, the success of an industrial park also hinges on whether it has local government support.
In the case of the Suzhou Industrial Park, for instance, its development slowed at one stage because some
local government officials were promoting a rival park. Not so for the VSIP. It has the support of both the central government in Hanoi and the local authorities in Binh Duong province, where it is located.
This is largely due to its Vietnamese joint venture partner, Becamex. Being a state-owned enterprise from the province, its chairman and chief executive officer Nguyen Van Hung has good ties with local officials.
Thanks to this, the local government set up in the VSIP a management board with the authority to issue investment licences, as long as the amounts involved do not exceed a certain level.
Local sensitivities
SUCH support has made a difference to tenants like F&N Foods, which has a dairy goods factory in the VSIP. Mr Wang Eng Chin, its general manager, said the ease with which he could secure licences, permits, customs and immigration clearances from the local authorities was a big plus.
Another important factor was the Singapore side''s willingness to accommodate local sensitivities on matters
like resettlement of farmers living on the land where the park was to be built. Resettlement was the responsibility of Becamex. When it began taking longer and costing more than initially agreed on, the Singapore side chose to be flexible. They saw how, over time, the local people wised up to the fact that the land would be resold to international investors at higher prices and started asking for more compensation.
Ms Low said: ''We sat down and re-discussed with Becamex and said fine, if we really need to spend a bit more, but it still makes commercial sense, even if the margins are lower, then let''s try to contain the costs and set aside another sum of money to get the land cleared.'''' This give-and-take attitude is likely why Becamex chairman Mr Hung describes the working relationship as a
''good partnership''. The Singapore side, he said in Vietnamese, through a translator, was ''supportive'' and ''willing to share
experiences''.
The fourth and final localisation strategy that Semb-Corp Parks pursued involved having a programme to train and transfer management know-how, and its system of corporate values, to the Vietnamese staff .Such knowledge transfer is also an entrenched practice in other Singapore-run industrial parks, including
Suzhou.
Since four years ago, the post of VSIP director-general has been occupied by a Vietnamese. Today, only three Singaporean expatriates work full time in the park.
This transfer has taken place without causing any hitches to tenants such as Mr Thomas Richard Siebert, the general director of American furniture manufacturer Stickley International. He said a good management that can solve problems and has an international outlook was among the reasons why his company chose the VSIP despite it costing more than other parks.
''Operating within VSIP, there''s a premium involved, but we find it to be worth it,'' he said. The takeaway from the VSIP experience is that while a overnment-to-government agreement may get an
industrial park off to a good start, that is really all it does.
The rest depends on how quickly the people on the ground can size up the local situation and adapt to it.
-------
lydia@sph.com.sg
Copyright â 2006 Singapore Press Holdings. All rights reserved. Privacy Statement & Con***ion of Access

The takeaway from the VSIP experience is that while a overnment-to-government agreement may get an
industrial park off to a good start, that is really all it does.

Bác trợ giúp cho em câu này sang hẳn VNese nhé! Nhất là cụm" overnment-to-government"
Thanks in advance

overnment-to-gornment agreement , ở đây là các hợp đồng giao đất từ người dân lại cho chính phủ để xây dựng các khu công nghiệp.

Well, I remember " Nhân viên kinh doanh" usually called "freeland". It satisfies U??

ko hiểu ý bạn, rõ hơn đi

Bài của báo The Straits Times -- Singapore
Sep 29, 2006
Hanoi woos overseas Vietnamese investors
Profit motive spurs communists and rich expats to develop country
By Vietnam Correspondent., Roger Mitton
IN DANANG - AN EXTRAORDINARY gathering took place in this coastal city last week.

Scores of well-heeled expatriates, who had fled their homeland during the Vietnam War to seek a better life overseas, were being welcomed back by top officials of the ruling Communist Party.
Not so long ago, both groups had regarded each other as a mortal enemy.
Even now, beneath the backslapping and the big grins, there was a latent wariness born of the fact that each hailed from an opposite way of life.
The visitors, though ethnically Vietnamese, are now citizens of liberal, free market democracies such as Australia, Britain, Canada, France and the United States.
Their hosts, however, still belong to one of the world''s few remaining communist regimes, where stateowned businesses dominate many sectors, the media is rigidly controlled and advocating multi-party democracy is a ticket to jail.
But what unites both sides is a desire to uplift their homeland - and do it profitably.
Vietnam is already booming and the Hanoi regime is keen to keep it that way.
One way it can do that is by drawing upon the foreign talent and investment potential of the 2.7 million overseas Vietnamese.
They, in turn, will be rewarded by renewing ties with their homeland - and making pots of money in the process.
So ideological differences were swept aside and the expatriate Vietnamese were wined and dined at one of the nation''s ritziest resorts.
Even their strange ideas about free speech and open societies were tolerated.
Said Mr Tran Quang Hoan, vice-chairman of the government''s Committee for Overseas Vietnamese: ''We can''t stop overseas Vietnamese bringing in strange and progressive ideas. We welcome them because we need their opinions and brain power to build our country.''
The visitors, attuned to profitable investment potential after years of doing business in Western markets, listened avidly.
Mr Tran Xuan Son built up a telecoms company in California''s Silicon Valley after escaping from his war-torn homeland in 1975. He has now returned to start a country-wide wireless broadband network.
Said Mr Son: ''It''s good to invest back home. Of course, we all hope to make money as well and this is a chance to get in early.''
But many overseas Vietnamese remain sceptical about Hanoi''s promises of easier immigration and licensing procedures, and its vows to open up the property market to them.
Said Vietnam National University Professor Augustine Ha Ton Vinh, who teaches business administration:
''They think the promises are just words. Does Hanoi really want them to return? The key will be whether the promises are kept.''
Last year, 467,000 overseas Vietnamese like her journeyed back to their homeland, an increase of 19.2 percent over the year before.
So Hanoi appears to be getting the message. Indeed, it was one of their own who urged the government to do even more. Mr Tran Bac Ha, director of Vietnam''s Bank for Investment and Development, chastised Hanoi over the hassles that overseas investors encounter, especially with immigration and Customs, tariff rules and corrupt officials.
Mr Ha said: ''Vietnam is at a new threshold. If the government does not accelerate its reforms and does not give junior officials more decision-making responsibility, our opportunity will pass.''